An Enterprise service marketplace is an App-store or Google-play equivalent that provides automated services as Catalogs. Digital transformation will usher in changes in the way services will be procured. Say goodbye to the complex world of buying, building and implementing complex tools/automation platforms.
In our continuing Digital Service Model blog series, we are looking at various paradigm shifts impacting Enterprises. In the previous blog, we looked at how a subscription model will replace the more traditional buy/build/operate model.
Now we are focusing our attention on subscribing to services. Once again we look to the consumer world for inspiration. The consumer world stands forefront in a lot of these innovations. Let us look at the App-store (or Google play) which is the source of procurement for Consumer services and see what make it unique and path-breaking and explore if we can adopt a similar approach in Enterprise world as well.
The greatest innovation in the consumer world is the App-store model of procurement.
App-store sets the standard for how apps can be packaged and transacted over a marketplace. Prior to Apple, users were well-versed with the idea of apps in a Nokia world. The apps came from the device provider and they worked well only with device. However, through an App-store model, Apps were virtualized, moved to cloud and made available for any user, anywhere. The portability, extensibility of apps were dimensionally improved.
An App built by a provider in Sydney could find suitable customers in Europe and India with minimal marketing effort. The nature and the scope of an app could be very small but they still found a way to monetize their solution. Their reach got exponentially high.
The Appstore widened the search network for a consumer to allow him/her search for an app of their choice that is personalized to their needs. Features such as like/share/comments etc., helped them make an informed decision.
Appstore spurs innovation in terms of new digital business models that disrupt the ecosystem. Who would have thought that a food delivery or cab booking could be a global business powering jobs across multiple economies? They also displaced many legacy business models that did not scale.
App store ensures unit cost of apps is low for both the provider and the consumer. It also enables a variable cost structure for the consumer who pays for what they use. A provider builds an app once and deploys it on the App Store for any user to download any number of times.
Let’s examine the procurement process with which we are common in the consumer world.
Any service they need can be ordered anywhere, any time and delivered instantly.
The whole transaction is seamless and zero touch. Finding apps on your mobile phone is easy. You can use the wisdom of the crowd through their ratings/reviews to identify any apps that cater to your service needs.
Source of Procurement: Your app store is the single source of procurement for all your digital needs. Whether you want to measure your calories burnt or transfer money there are apps available from one common store.
Point of Consumption: The smartphone turns into a single point of consumption, making your personalized and downloaded apps available for your use at any time.
The concepts of Source of Procurement and Point of Consumption seem all baked into one device for now. Many people don’t think it makes a big difference, however, they are more pertinent when extended to an Enterprise world.
A lot of the services in the consumer world are super complex ex: stock trading, money transfer, e-commerce, etc. However, they have been simplified and offered in this model.
If complex services can be procured and simplified in the consumer world, there is no reason why it can not be extended to an Enterprise Service Delivery world. !!
In the next 5–10 years, we see the Enterprise’s Service Consumption will follow a model similar to the one discussed here and move into exchanges and marketplace where services can be sourced at a click in a zero-touch manner.
The Enterprise Service Marketplace will host all pre-built fully automated services needed for organizations. Service providers globally, will constantly create and publish services on one side. Enterprises will subscribe and use these services on a pay-as-you-go model on the other side. Each Enterprise will have its service exchange where subscribed services are available.
The service Exchange will be omnichannel enabled for placing orders across any channel — web, voice, chat, mobile, etc.,
The Enterprise service marketplace will serve as the Source of procurement for any automated service. A Service Exchange specific to an Enterprise will serve as the point of consumption for any service need.
The benefits we saw with an app store are exactly applicable in the current scenario too
Service Marketplace defines a standard for how services can be automated and published by any provider across any platform. So whether you are provisioning a server on the cloud updating the HR module on-prem or providing Access to a folder, all services follow a common standard. All of these are automated and self-service enabled.
Service providers can create and publish services through the common marketplace. This approach creates a new revenue lever for them, while at the same widening the market reach with customer segments not established earlier.
Enterprises now have a variety of choices for services to choose from. If they are looking for an automated service, the first place they start searching is the Marketplace. This eliminates the need for long RFP processes and a faster procurement cycle with minimal commitments.
The Service Marketplace will spur disruptive innovation by industry domain /standard (Manufacturing services, GDPR-compliant services, Pharma-compliant services, etc.) and across multiple tools and technologies. New services will continue to grow at a rapid pace not witnessed before.
The service build and service delivery costs will go down significantly through this approach. While for a provider their incremental cost of automation and delivery goes low, for a customer the end-to-end cost of discovery -procurement and delivery will drop anywhere between 40–60% of their current costs.
Thus, in summary, we see the Service Marketplace as a true game changer in the world of Enterprise procurement. The model aligns well with the need to Accelerate digital, provide enterprise agility, and Reduce procurement costs and efforts. Enterprises that are quick to adopt this model will turn out to be true champions in maintaining a competitive edge.
In the next blog, we will see how subscription costs could be variable through this approach.
